Read the full judgment text of HCMP 1053/2008 on BabelCite. This Court of First Instance judgment was delivered on 17 January 2011 before Lam J.
Civil procedure – costs – trust construction – hostile proceedings – Beddoe application – fiduciary indemnity – Order 62 Rule 6(2) – Letter of Wishes dated 23 April 1996 – interpretation of Clause B(3)(a) regarding transfer of shares in Kandos, Venus and LPHL by deceased Law Ting Pong to his son, the Plaintiff – Plaintiff initially contended the transfer was an outright gift, supported by his assertion that his father told him he could use the assets in whatever way he liked, and later argued at the hearing that the instrument created a fiduciary power he was not obliged to exercise with a gift over to him personally in default – non-neutral defendants contended the instrument created a valid trust – whether the originating summons was an ordinary construction summons or hostile proceedings commenced for the Plaintiff's personal benefit – court held that in substance the Plaintiff was acting for his own benefit rather than for the benefit of the fund, falling within the exception to the general rule that a fiduciary should obtain his costs from the estate – whether the Plaintiff could have protected his costs position by a Beddoe application – given his different roles and personal interest, applying the principles in Alsop Wilkinson v Neary as illustrated in HSBC International Trustee v Tam Mei Kam, it was unlikely a pre-emptive costs order would have been granted in his favour – whether Order 62 Rule 6(2) applies – court did not need to rule on the scope of the rule but held at common law that a fiduciary appointed by an instrument may seek guidance on construction with costs borne by the fund, subject to the same two exceptions (unreasonable conduct or acting for personal benefit) as those applicable under Order 62 Rule 6(2) – who is the successful party for costs purposes – the non-neutral defendants succeeded on the main issue of whether the settlement created a trust – whether costs should be apportioned regarding the default position and extrinsic evidence issues – proportionate order of 85% made in favour of non-neutral defendants rather than issue-based order, given the length of the hearing and relative success – neutral defendants' costs (1st, 6th, 9th) ordered out of the trust fund on indemnity basis under the first category in Re Buckton, except for the substantive hearing on 6 July 2010 where, despite their neutral stance having been indicated at the pre-trial review, 1st and 9th Defendants attended by counsel holding watching briefs and 6th Defendant appeared through Mr Fung SC and Ms Wong without filing skeleton submissions – Plaintiff to pay personally 85% of non-neutral defendants' costs on party-to-party basis – Plaintiff to pay personally Mr Yu's clients' costs of the costs hearing on party-to-party basis – other defendants entitled to costs of the costs hearing from the trust fund on indemnity basis.
Legal issues: Whether proceedings were an ordinary construction summons or hostile proceedings · Significance of failure to make Beddoe application · Application of Order 62 Rule 6(2) · Successful party for costs purposes · Apportionment of costs regarding default position and extrinsic evidence
Outcome: The Plaintiff is ordered to pay personally 85% of the costs of the non-neutral defendants (2nd to 5th, 7th and 8th Defendants) on a party-to-party basis; neutral defendants (1st, 6th, 9th) recover their costs from the trust fund on an indemnity basis (except for the substantive hearing on 6 July 2010); the Plaintiff is denied any indemnity from the trust fund in respect of his own costs or his liability for the defendants' costs.
Cited by 4 cases · Cites 2 cases